Wednesday 12 November 2014

Squandered Victory: Reflections On The Fall Of The Berlin Wall

Disputed Victory: The Neoliberal inheritors of Communism's totalitarian mantle claim the Fall of the Berlin Wall as an unqualified victory for free-market capitalism. The true victory, according to Professor M.P. Leffler, belonged to the managed, social-market capitalism of Western Europe. The tragedy of the past 25 years lies in the extent to which that victory has been squandered.

IT WAS TWENTY-FIVE YEARS ago last Sunday that the Berlin Wall fell. On 9 November 1989, Gunter Schabowski, over-tired, under-briefed and unaccustomed to dealing with genuine journalists, informed his countrymen (erroneously, as it turned out) that all restrictions on persons leaving the German Democratic Republic (GDR) had been lifted.
What had, until then, been a rather lack-lustre press conference instantly came alive. Confused, embarrassed and desperate to escape the rising chorus of questions, Schabowski indicated that, as far as he knew, the new regulations would come into force “right away”. East Berliners, watching all this unfold, live, on state television, did not wait for further corroboration. Tens-of-thousands flocked to the Wall’s checkpoints where, lacking orders, the border-guards simply waved them through. The Cold War was over.
In the quarter-century since Schabowski’s historic misinformation brought the Cold War to an end, the fiction agreed upon by the victors of that long ideological struggle is that the fall of the Wall marked the global triumph of free-market capitalism.
Not true, says Melvyn P. Leffler, the Edward Stettinius Professor of American History at the University of Virginia:
“With what we now know about the history of the Wall coming down – the contingency of the event and the agency of ordinary people – we should draw different lessons, ones that are not about the universal appeal of freedom or the munificence of free markets or the efficacy of strength, power, and containment.”
Professor Leffler rightly celebrates the role of citizen-based activism in the collapse of the Soviet Bloc. He points to the many thousands of brave individuals who insisted that the East-West commitment to human and civil rights enshrined in the Helsinki Agreement of 1975 be upheld by the regimes of actually existing socialism.
“These NGOs worked tirelessly to shame transgressors. They nurtured transnational contacts, and their mutual support sustained dissidents throughout Eastern Europe and the Soviet Union. As much as anything, this led to the downfall of the repressive communist regimes.”
Not that repression constituted the dominant motif of the “Velvet Revolutions” that swept across Hungary, Czechoslovakia and the GDR in 1989. The example of Leipzig is striking in this respect. When, their patience exhausted, the Stalinist hardliners still in charge of the GDR ordered local Interior Ministry troops to forcibly suppress the “Monday Demonstrations” gripping Saxony’s largest city, their commanding officer point-blank refused to let his men leave their barracks. He would not, he said, order Germans to fire upon Germans.
Transpose this situation to the United States, and ask yourself how likely it is that the Chief of the Los Angeles Police Department, or the Commanding Officer of the Ohio National Guard, would refuse an order to fire upon their fellow Americans? No US agents of state repression have ever refused such orders in the past.
It was not free-market capitalism, red in tooth and claw, that the peoples of Eastern Europe embraced in 1989, but the tamed capitalism of European social-democracy. As Professor Leffler observes:
“When we think about the collapse of communism, we should emphasise and celebrate the attractiveness of a social market economy – not free enterprise. Indeed, it was the principles of the social market, regulated competition and a commitment to social equality and a safety net, that were incorporated into the law establishing the economic and monetary union of West and East Germany. In the ideological competition between free enterprise and communism, the social market won the Cold War.”
Twenty-five years on, we should, perhaps, ponder the near-universal failure of social-democratic parties to grasp the significance of their ideological victory. Rather than celebrate the triumph of moderation over extremism – of all kinds – they chose instead, to embrace the cold inhumanity of the new, neoliberal, iteration of totalitarianism.
Neoliberalism’s cheerleaders gleefully point to the excesses of the Stasi (the East German secret police) as proof of communism’s moral delinquency. But, twenty-five years after the Stasi’s unlamented demise, is such neoliberal triumphalism justified? In the light of Edward Snowden’s alarming revelations concerning the electronic reach of the NSA (and its ‘Five Eyes’ partners) are the peoples of the English-speaking democracies any freer from state-sanctioned “total surveillance” than the peoples of the vanished Soviet Bloc? In an age of ‘extraordinary rendition’, ‘black-sites’, ‘waterboarding’ and drone strikes; exactly who are the moral delinquents?
Certainly, we must celebrate the triumph of human freedom that the fall of the Wall so powerfully symbolised. But, as we do so, let us not fall into the error of believing that everything which followed the collapse of actually existing socialism in any way represents the uncomplicated vindication of the human spirit. Stalinism was not the answer, but there remains a powerful truth in the succinct message some unknown graffitist daubed upon the grim concrete canvass of the Berlin Wall:
This essay was originally published in The Press of Tuesday, 11 November 2014.


Guerilla Surgeon said...

There was an article recently, might have been in the Guardian, which explained that Germany was looking at some of the East German innovations with a view to re - adopting or expanding them. Particularly in the area of medicine as I remember. Not the secret police though, Germany seems to have better privacy laws than just about anywhere, perhaps because of their experience with the Stasi. Reasonably interesting, might be worth a search :-).

Guerilla Surgeon said...


Charles said...


Yes indeed but it was attempting socialism that resulted in Stalinism, yet as you point out, capitalism became something quite attractive: liberal, social market driven democracy.
So clearly capitalism has proved to be an utterly superior starting point or option, i.e. more progressive and humane than socialism, once it evolves.

Anonymous said...

You are overlooking a key point.

The fall of the Wall removed a limitation on the international Right: it meant that they could pursue their laissez-faire dream unimpeded. They would never again worry that welfare cutbacks would result in Moscow-inspired Revolution.

So the centre of political gravity shifted rightwards. And there it has stayed, these part twenty-five years.

Alan said...

Anonymous is right. The fall of the Wall and the domino-like collapse of the Communist states was 'brakes off' for the United States and the Neanderthal neo-liberalists from the Chicago School of Economics.

Charles is wrong. Capitalism in evolution is not 'more progressive and humane' as it might have been 50 years ago. Since then it has been trying to shed that baggage and 'evolve' back to its earliest harsh roots in the mid-1800s.

Alan Rhodes

Charles said...

I also agree, partly with A.
To some, and in some places the fall of socialism-communism has puffed up the rawer capitalists but as Chris pointed out, Europe has mostly continued evolving a quite moderated version of capitalism. The ex socialist countries have not always followed that path.
Conservatives like me value evolution of society and capitalism, because it really is not an ideology, cf communism, allows for evolution, and that can and usually is progress. As Pinker has shown so well, the better angels of our nature have predominated for 70 years now. However, we can still go backwards and so effort is always required to stay on track with 'a kinder, gentler machine-gun hand' to quote Mr Young.

Victor said...


On this occasion, you are not completely wrong, in that capitalism did evolve into something more humane and sensible between 1945 and circa 1975.

It did so, in part, because of the pressures of the Cold War and the (largely illusory but often persuasive) attractions of the Stalinoid version of socialism.

But it also did so because intelligent people of all classes and most political tribes had taken on the lessons of the Great Depression, concerning the inadequacies of a wholly market-driven approach to economic and social issues.

Moreover,parties that had previously defined themselves as "Socialist" began (with greater or lesser reluctance) to accept that they were actually "Social Democrats" (viz. believers in the social provision of health, education, housing etc. and in counter-cyclical Keynesian economics).

As the late Tony Judt put it (and I quote from memory and therefore only approximately): Socialism may have failed but Social Democracy succeeded beyond the wildest dreams of its advocates.

Yet the triumph was of short duration, with a new generation of silly ideologues forgetting the lessons of history and resurrecting the free market dogmas that had led to so much past misery and dysfunction.

Interestingly, they did so against
the relatively unusual background of "Stagflation", which threatened, albeit briefly, to discredit Keynesianism, during the 1970s. I note that we haven't really had Stagflation since then, only plain old fashioned recessions. But the neo-liberal tide has rolled on nonetheless.

I also note that you style yourself as a "conservative". But there's nothing remotely conservative about the notion of "heroic destruction" or about the belief that "there is no such thing as Society". The mighty shade of Edmund Burke would be horrified by such quintessential, anti-human, anti-social, "classical liberal" nonsenses.

Yet this was the viscerating creed that was imposed on much of the former Soviet empire after 1989. Small wonder that, in terms of human health, life and welfare, it proved so destructive! And small wonder that local and global mafias have flourished, often quite openly, in its wake.

I would agree that the tide was probably least destructive in some of the countries of Central Europe, where there were strong traditions of free political life and communal organisation that re-emerged with remarkable vigour as the Stalinoid straightjacket was removed.

In the case of the former DDR, this latter phenomenon was buttressed by the strength, wealth and authority of the West German state, which had been a highly successful exemplar of the "Social Market" economy, as I learned for myself, whilst working in the Federal Republic during the 1970s.

But, by the late 1990s, Germany too was starting to embrace the now globally prevalent (and rather un-German) credo of market liberalism, which, by the way, the Germans have traditionally called "Manchesterismus".

The result, when combined with a perhaps more quintessentially German taste for frugality and fiscal rectitude, has been a new slice of human misery and economic dysfunction across a continent now largely linked together by the additional foolishness of a common currency.

Just last week, I received an email from a much-respected friend in Cologne. He wrote:

'The whole grand coalition... presides over an increasingly damaged social system and growing (particularly old-age) poverty. I suppose that British or Russian Capitalism is worse than what we have got here, but that isn’t much consolation for the growing number of people hit by the policies of this “ unity government “ and its predecessors since 1998.'

Food for thought?

Charles said...

Yes that is food for thought Victor, which you have clearly done more of than I. Very interesting too.
But you should not assume I am a conservative who thinks like Thatcher is assumed to have thought. I know she said there is no such thing as society but I think she just meant that simply, in that there is no such thing physically, that you can measure and get the opinion of, or 'take the pulse of'. She meant that it is the individual that exists most clearly and so society is merely a collection of individuals living and relating together. She had a point to make and at that time it was a good one.
Anyone claiming to act for the good of society is likely to be acting for themselves or their little interest group. They are likely to be on some con, pretending to care about 'society' yet strangely doing no other individual any good.

Similarly (about your assumptions) I would like examples of where you see raw capitalism in charge these days in the West? We all have huge welfare systems and all kinds of regulation and laws controlling what we do to each other. Hardly Dickensian. Most Western countries cannot run a surplus these days for all the provisions for welfare, health and education they have to pay for. Hardly capitalism, raw in tooth or claw!

No I think, like Pinker & others, we live in the best world so far. A pretty benign one too.

Victor said...

Hi Charles

Sorry, I've only just noticed your latest item on this thread.

I think we'll have to agree to differ about what Maggie meant and about her achievements.

I confess to a degree of prejudice, having been rendered unemployed twice by her exercise of office. But there were millions of others who could tell a similar tale or one much worse.

A point I would make, however, is that there was nothing remotely "conservative" about the de-industrialisation of Britain, the destruction of communities or (as her one-time boss, Harold Macmillan, pointed out) "selling off the family silver" in a short-sighted display of ideological rectitude.

And , of course, you're right that no-one in the western world is currently facing quite as cold-hearted a welfare system as that imposed by Victorian classical liberals on the poor of their day.

But the trend of politics throughout the West (and beyond) for the last thirty years has been broadly, if not wholly, in that dismal direction, despite ample proof that it leads to dysfunctional economies as well as social decay.

Moreover, that's very much the approach which western institutions urged (and, to some extent, enforced)on the former Soviet Union in the early 1990s, with immediately horrendous consequences for the lives of all but the most enterprising or carnivorous.

Turning to our current situation, it's obviously hard for governments to run surpluses during a recession or its aftermath, as the tax take automatically reduces and the demands on government funding increase.

But governments that choose to stimulate their economies (however inadequately) normally come out of recessions quicker and, although burdened with even more debt, in a better position to repay that debt, should that be one of their priorities.

That's one reason why the US and UK economies are currently in tenuous recovery mode, whilst Germany's is looking uncharacteristically sluggish.

Of course, the medicine doesn't always work, as the Japanese example shows. Even so, Japan's credit and the skills of its technologists and exporters are good enough to keep it going at a reasonably high level, despite indebtedness.

But an excessive burden of government debt is hardly a problem that New Zealand faces.

According to the IMF's 2012 figures, our debt to GDP ratio stood at just 26.416% as compared to Germany's 57.224%, the UK's 82.785%, America's 87.859% and Japan's whopping and (I agree) troubling 134.325%.

Moreover, only 10.2% of our miniscule public debt was spent on social welfare during the year ending 30 June 2014, despite employment levels not yet having returned to pre-recession levels and despite this percentage including the inevitably burgeoning (and, again, troubling) cost of NZ Super.

So (ideology and self-righteousness apart), wherein lies the case for making life ever tougher for the more vulnerable people in our society?

Victor said...

Correcting my previous post....

It's 10.2% of total government expenditure rather than debt spent on social welfare (including NZ Super).